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New prosthetics policy could affect Boston Scientific

The US Department of Veterans Affairs is planning to rein in rising prosthetic costs by shifting responsibility for ordering some prosthetics, including artificial limbs, from medical personnel to contracting staff. It’s also requiring more documentation on the spending.

The changes are designed to reduce prosthetic costs, which have jumped 80 percent in the past four years, according to the VA inspector general.

VA spending on prosthetics rose to $1.8 billion in the fiscal year that ended Sept. 30, from $1 billion in fiscal 2007, according to the inspector general’s March report.

The agency overpaid on 23 percent of prosthetic limb transactions made during fiscal 2010, spending about $2.2 million more than necessary that year on those items, according to a separate inspector general report the same month.


“The department realized it was weak in certain areas of contract administration and awarding of contracts,” Norbert Doyle, chief procurement officer of the VA’s Veterans Health Administration, said at the hearing. “This will bring it in- house and ensure the best use of taxpayer dollars.”

If a clinician says a specific product is necessary for a veteran, that item will be purchased, Doyle said.

“I do not want my contract officers making a decision about what goes into a veteran’s body,” he said. “That is clearly a clinician decision.”

Companies including Minneapolis-based Medtronic Inc. and Natick, Massachusetts-based Boston Scientific Corp. may be affected by the changes.

The VA paid Medtronic about $5 million and Boston Scientific about $3 million for prosthetic products or services in fiscal 2010, according to federal procurement data compiled by Bloomberg.

The agency’s policy changes affect all prosthetics, a broad category that also includes hearing aids and wheelchairs, that cost more than $3,000.